Lecture Notes: The Power of Investing and How to Start

Introduction

• Imagine starting investing in 1985.
• Experience rapid market growth, followed by downturns like Black Monday.
• Despite downturns, holding investments can lead to recovery and growth.
• Personal example: Speaker invested from 1985, achieving average returns of 11.23% per year.
• Investing $250/month could lead to a return over 6,000%.

Importance of Investing

• Investing consistently can lead to significant growth over time.
• Financial downturns will occur, but the market often recovers.
• Use of personal investing story to illustrate long-term gains.

How to Start Investing

Setting Up an Account

• Need for an emergency fund of 3-5 months of living expenses before investing.
• Importance of choosing a tax-advantaged account:
  • UK: Stocks and Shares ISAs.
  • US: Roth IRAs.
• Use of online platforms makes starting easier (e.g., Trading 212 app).

Depositing Funds

• Simple process with various options (bank transfer, debit card, Apple Pay).
• Example: Depositing £400 to invest in stocks.

Strategy for Investing

Free Stocks

• Opportunity to get free stocks with promotional codes.
• Inviting friends to join investment platforms can result in free stocks.

Diversifying Investments

• Investing in index funds (e.g., S&P 500) is akin to owning a piece of all top companies.
• Benefits of index funds: Mitigate risks by spreading investments.

Automating Investments

• Example: Investing a small amount daily in the S&P 500.
• Automation allows for consistent, hands-off investing.
• Speaker's son’s experiment: Investing £5 daily.

Picking Stocks

Technical vs. Fundamental Analysis

• Technical Analysis: Short-term, based on price charts and patterns.
• Fundamental Analysis: Long-term, based on company financial health.
• Speaker prefers fundamental analysis for long-term investments.

Buying Individual Stocks

• Process of buying stocks on Trading 212:
  • Use search features and social feeds to find stocks.
  • Access important financial documents for analysis.

Types of Orders

• Market Order: Buy at current market prices.
• Limit Order: Set a price to purchase if the stock hits that level.

Final Thoughts on Investing

• Investing young and consistently can lead to considerable wealth growth.
• Diversified portfolios help endure market downturns.
• Encouragement to start investing early.

Call to Action

• Subscribe for more content and insights on growing wealth.

Disclaimer

• Speaker is not a financial advisor; shares personal approach to investing.